Are HR professionals more able to contribute to business today than yesterday? My sense is yes, although the progress may not be fast enough
Most HR professionals have made enormous progress in the last few decades in their professional stature and contribution to business success. But, the journey ahead continues in the direction of delivering value more than having a single point-in-time destination of when that value has been accomplished.
The logic for HR’s future is simple and begins with a direction: HR should add value. This direction needs to be connected to the business, both the business context, which shapes decision making, and specific stakeholders around whom business strategies are created. Out of this context, HR defines its work targets: individual abilities (talent), organization capabilities (culture), and leadership. But, the simple logic requires more detailed assessment to accomplish the journey.
To focus on the value created, I will address four questions that HR professionals should answer to prepare for their future.
Why: why does HR exist? For decades and continuing with many today, HR has focused on activities, not outcomes. The outcome of HR is to create value for the business, and ensure that business accomplishes its goals. Value is defined by the receiver more than the giver.
Where: where should HR focus to deliver full value? HR should deliver value to each of these stakeholders: employees, line managers, costumers, communities, and investors. This requires that HR professionals know and understand the expectations of each stakeholder and are able to align their practices to their needs.
What: what should HR professionals contribute to their businesses? HR contributions are not just about the activities of HR (sourcing, compensation, training), but about the outcomes of the HR work.
How: how should HR be organized and how should HR professionals prepare for the future? Ultimately, ‘HR’ refers to both the HR organization or department and the HR people or professionals. Both departments and people need to be upgraded for HR to deliver value.
Upgrading HR professionals requires identifying the competencies to be successful. The RBL Group, in conjunction with the University of Michigan and a variety of HR professional associations from around the world, has studied the competencies and agendas of HR professionals as business partners for over 20 years.
First, we need to ask the question, are HR professionals more able to contribute to business today than yesterday? My sense is yes, although the progress may not be fast enough.
Second, companies will continue to require fewer HR professionals to do transactional administrative work. As companies grapple with the challenges of focusing on the most important wealth creating activities of the firm, it will have to eliminate some nice-to-have but strategically unnecessary HR activities.
Third, as HR professionals become more able to contribute to business success, they will have a more balanced approach. In the most recent round of our competency research in 2007, we found that effective HR professionals function in six roles. From credible activists; strategy architects, contributing to the development and execution of business strategies and design and delivery of HR practices and structure; culture and change stewards; talent managers; operational; and business allies.